Investment Treaty Law and the Fear for Sovereignty: Transnational Challenges and Solutions

Abstract

This article addresses the vagueness, and the interpretative challenges associated with, international investment agreements (IIAs) and develops a new normative framework for interpreting these treaties. It focuses on the historical embedding of investment protection as a means of facilitating economic development as well as upon its synthetic public law nature. The analysis shows that a teleological approach to interpretation imposes boundaries on the meaning of substantive IIA provisions. The article then elaborates how the transnational dimension of IIAs provides a benchmark, which is the level of protection offered to economic actors against interference by the state in countries with the highest rule of law standards. The article then shows how the resulting challenges of comparative public law could be addressed through the methodology of re‐ and pre‐statement of transnational uniform ‘principles’: sophisticated and detailed rules striking the proper balance between private economic interests and the public regulatory interest, so as to provide more legal certainty for both investors and host states.

The investor-state arbitration legitimacy crisis: Could AI be its future savior (or resurrector)?

“…Despite the arbitrators being appointed by a specific party, they are expected to be neutral, transparent and confidential. 27 These requirements translate into the legitimacy of the arbitral tribunal and ultimately -of the arbitral award that they pronounce. It is, therefore, worrying that 55% of all known investment-treaty disputes included the same group of individuals in different capacities.…”

A Case Against Crippling Compensation in International Law of State Responsibility

“…234 At the level of primary rules, examples could range from tweaks of particular rules, like relaxation of promptness or valuation standards for lawful expropriation by reference to the effects on the State, 235 to recalibrating scope and content of fields of law so as to prevent the characterisation as wrongful of conduct likely to give rise to crippling compensation. 236 Another technique would consider limitation-of-liability clauses, either related to particular primary rules, instruments and activities, or building on the EECC's Awards to rationalise the capping of crippling awards on the basis of widely ratified human rights instruments. 237 At the level of secondary rules, methods of valuation most likely to lead to crippling compensation could be reconsidered.…”